RRSP | January 2024

n THE CARILLON STEINBACH, MAN. A14

n www.thecarillon.com THURSDAY, JANUARY 25, 2024

RRSP TAX SAVINGS & RETIREMENT RICHES

Tax software can’t do it all! T ax season is fast approaching! If you’re thinking about using a computer program to file all the specific tax breaks that a hu- man tax professional could uncover. 3. It may not be up to date on the latest tax laws

your taxes, you may want to recon- sider. Here are four shortcomings of tax software. 1. It can’t understand complex situations Although tax software is capable of handling most common tax sce- narios, it may not be programmed for more complex situations, such as multiple income sources, invest- ments, business income or interna- tional tax matters. A professional tax preparer will ensure you don’t miss out on possible deductions or cred- its. 2. It can’t tell you if you missed something Tax software relies on accurate data entry, meaning incorrectly entered information could go un- noticed and result in inaccurate returns. Additionally, although soft- ware can suggest deductions and credits, it may not be able to identify

Tax laws and regulations change from year to year, and tax software might not always be up to date. These inaccuracies can result in fi- nancial discrepancies and potential legal complications. A professional tax preparer ensures your taxes are filed correctly and you get the most out of your return. 4. It can’t provide personalized advice Although tax software can auto- mate the filing process, it can’t pro- vide customized advice based on your unique situation. A tax profes- sional offers personalized guidance tailored to your financial situation. This can help you make informed decisions and optimize your tax strategy for the future. Don’t sweat this tax season. En- trust your taxes to a local profes- sional!

10 reasons why you should use a mortgage broker U sing a mortgage broker offers numerous advantages when navigating the complex pro- lenders and organizing documenta- tion, saving you time and effort. 4. Customized solutions mortgage. They can guide you on budgeting, credit improvement and other financial aspects to enhance your overall financial health. 8. Accessibility

cess of securing a home loan. Here are ten compelling reasons why you should consider using a mortgage broker: 1. Expertise and guidance Mortgage brokers are industry experts with in-depth knowledge of the mortgage market. They can guide you through the complexities of loan products, interest rates and terms, helping you make informed decisions aligned with your finan- cial goals. 2. Access to multiple lenders Unlike dealing directly with a sin- gle lender, mortgage brokers have access to a wide network of insti- tutions. This allows them to shop around on your behalf to find the best terms and rates tailored to your specific needs. 3. Time and effort savings Securing a mortgage involves extensive paperwork and negotia- tions. Mortgage brokers streamline the process by communicating with

Mortgage brokers assess your unique financial situation and goals to find a mortgage that aligns with your specific needs. This personal- ized service can result in more ben- eficial terms and an increased likeli- Experienced mortgage brokers are skilled negotiators. They can lever- age their relationships with lenders to secure better terms on your be- half, potentially leading to lower in- terest rates, reduced fees and over- all cost savings over the life of your loan. 6. Money savings While there may be fees associ- ated with using a mortgage broker, the potential cost savings in terms of lower interest rates and favourable terms often outweigh these expens- es. 7. Financial counselling hood of loan approval. 5. Negotiation skills Mortgage brokers offer valuable financial advice beyond securing a

Mortgage brokers are typically more accessible than loan officers at banks. They can meet with you at your convenience, offering a level of flexibility that traditional lenders may not provide. 9. Smooth application process Brokers guide you through the mortgage application process, en- suring all necessary documents are submitted accurately and prompt- ly. This helps expedite the approval process and increases the likelihood of a smooth transaction. 10. Long-term relationships Establishing a relationship with a mortgage broker can be beneficial beyond a single transaction. They can become a trusted advisor for your future real estate deals, provid- ing ongoing support and guidance. Need a mortgage? Contact a mort- gage broker in your area to help you get the best rates and terms.

Filing taxes last minute: common mistakes to watch out for F iling taxes last minute can be a stressful task, and the rush to meet the deadline often ing through tax preparation can result in missing crucial informa- tion, such as forgotten deductions or credits.

• Filing under the wrong status. Choosing the wrong filing status can affect your tax liability. Make sure you select the correct one, such as single or married, based on your situation. • Ignoring e-file options. Elec- tronic filing is fast and secure and reduces the risk of errors compared

to paper filing. Opt for e-filing to save time and ensure your return reaches the CRA on time. • Missing the deadline. Filing late can result in penalties and interest. If you can’t meet the deadline, file for an extension. • Neglecting documentation. Keep records of all tax-related doc- uments and receipts for deduc- tions. This ensures accuracy and helps in case of an audit.

• Not seeking professional help. If your tax situation is complex or you’re unsure about deductions, credits or changes in the tax code, consider seeking assistance from a tax professional. The deadline to file your taxes is April 30. Avoid the stress of filing taxes at the last minute and contact a local professional tax services company to ensure a smooth and accurate process.

leads to common mistakes that can cost you time, money and peace of mind. Be aware of these common errors to ensure a smooth last-min- ute tax filing process: • Incomplete information. Rush-

• Forgetting to sign. Failing to sign your tax return can result in it being rejected. Ensure you’ve signed and dated all necessary documents.

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STEINBACH, MAN. THE CARILLON n A15

www.thecarillon.com n

THURSDAY, JANUARY 25, 2024

RRSP TAX SAVINGS & RETIREMENT RICHES

How to teach kids about money T eaching kids about money is a crucial life skill that lays the foundation for their financial well-being as adults. Try these effective strategies to raise financially respon-

3. Lead by example Demonstrate responsible habits in your own life. Involve your kids in family financial discussions. Make them part of decisions, like budgeting for vacations or saving for major ex- penses. 4. Teach delayed gratification Teach kids to set goals and save for them over time. This instills the concept of patience and demonstrates that waiting can lead to more fulfilling rewards. 5. Explain needs vs. wants Encourage critical thinking about purchas- es by discussing whether an item is necessary or desired. This distinction helps kids make thoughtful spending choices. Do you want to set your kids up for future fi- nancial success? Talk to an investment advisor in your area to discover the possibilities.

sible children. 1. Start early

Start discussing money concepts, like saving, spending and earning, from a young age. Use relatable scenarios, such as shopping trips, to

explain these ideas in simple terms. 2. Provide hands-on experience

Provide a small allowance and encourage your children to allocate it among different categories like saving, spending and donat- ing. This practical approach teaches them the value of budgeting and decision-making. Ad- ditionally, allow your kids to open a savings ac- count. This could spark interest in saving and growing money over time.

9 ways to pay off your credit cards faster C redit card debt can trap you in a cycle of financial stress as high interest rates compound your balance, making re- temporary zero per cent or low introductory rate and transfer your balances to that card, allowing you to make significant headway

payment challenging. Paying it off demands financial discipline and smart planning. Here are 9 ways to tackle credit card debt. 1. Create a budget Establish a comprehensive budget that maps out your income, expenses and debt obligations. This transparency helps you identify areas where you can trim unneces- sary spending, freeing up more funds for debt repayment. 2. Use the debt snowball method This method involves paying off your debts with the smallest balances first, regardless of the interest rates. This can help you build momentum and motivation as you see your debts disappear one by one. 3. Use the debt avalanche method This method involves paying off your debts with the highest interest rates first, regardless of the balance size. This can save you money in the long run, as you’ll pay less interest over- all. 4. Consolidate your debt or transfer your balance Consider debt consolidation, whereby you secure a bank loan at a lower interest than your credit cards and pay off all your cards at once. Alternatively, get a credit card with a

during the interest-free period. 5. Increase your payments

Whenever feasible, contribute more than the minimum required amount. Even a small extra payment can significantly reduce the in-

terest that accumulates over time. 6. Negotiate lower interest rates

Negotiate lower interest rates with your credit card companies. A history of punc- tual payments and a good credit score can strengthen your position in these discussions. 7. Avoid new charges Temporarily stop using your credit cards until your existing debt is under control. Adding to your outstanding balance will only make matters worse. 8. Supplement your income Explore ways to increase your income, such as taking up a part-time job, freelancing or selling items you no longer need. Dedicate the extra funds to debt repayment. 9. Get professional help Working with a debt professional, like a fi- nancial advisor or credit counsellor can help you develop a debt reduction strategy that works best for you. They may even be able to reach out to your creditors to negotiate a bet- ter deal for you.

VARIABLE RRSP STARTING AT 3.90% * At this rate, you’ll get there.

Negotiating with creditors: 5 tips I f you’re swimming in debt, you may be able to get lower interest rates and gain more control of your finances by negotiating with your creditors. Does the thought of bar- gaining with credit card companies and banks seem daunting? Try these strategies. 1. Research and prepare the negotiation. Creditors are more likely to cooperate if you engage with courtesy and demonstrate your commitment to resolving the debt. 4. Have your terms ready

Get the most from your RRSP with tiered rates and expert advice to guide the way. Whatever you’re saving for, we’ll help you get there. The 2023 RRSP contribution deadline is February 29, 2024.

Propose a lower interest rate based on your research. Be prepared to provide evidence of competing offers or a track record of timely payments. Suggest a temporary rate reduction or a revised payment plan if needed. 5. Get it in writing Once you’ve reached an agreement, ensure you receive written confirmation from the creditor. This will help avoid any misunder- standings later. You can also solicit the help of a debt settle- ment company that may be able to negotiate better payment terms on your behalf.

SCU.MB.CA/RRSPS

Before initiating negotiations, gather infor- mation about your debt, the current interest rates offered by competitors and your pay-

ment history. 2. Start early

Reach out to creditors before you’re in seri- ous financial trouble. Explain your situation honestly, highlighting changes in income, un- foreseen expenses or other challenges that af- fect your ability to make payments. 3. Be polite Maintain a respectful tone throughout

*Rate subject to change.

n THE CARILLON STEINBACH, MAN. A16

n www.thecarillon.com THURSDAY, JANUARY 25, 2024

RRSP TAX SAVINGS & RETIREMENT RICHES

Are financial concepts confusing for you? Are you concerned about: Bills, debts? Funding education? Saving for retirement?

How emotions affect financial decisions T he choices you make with your money aren’t purely rational; they’re deeply intertwined with your psychological

Education and Financial Professionals 6:00 PM Jan 26, 2024 John and Charity Schellenberg Come with someone you care about! Eastman Education Centre 385 Loewen Blvd, Steinbach, MB Learn more about how money works. Build a stronger financial foundation. Custom-roasted coffee, snacks. Door prize. Do you qualify for government- sponsored disability savings? What is your Financial IQ?

and cultural norms can also shape your at- titudes toward money. A scarcity mindset developed in tough times can lead to exces- sive hoarding. Growing up in a family with a carefree attitude toward money might give you a tendency to overspend. Social com- parison is another influence: trying to keep up with your peers’ lifestyles can cause fi- nancial strain. Mindful decision-making Recognizing your emotional triggers can help you make more deliberate financial de- cisions. Create a clear budget, set financial goals and take note of situations that cause you to veer from your plan. If you’d like support in making healthy fi- nancial decisions, talking to a financial ad- visor can help.

makeup. Understanding the psychology of money can help shed light on your financial decision-making. Understanding emotions Emotions like fear, greed and impulsive- ness play a significant role in your financial choices. Fear can lead you to make overly conservative investments and miss out on potential gains. On the other hand, greed or desperation might push you towards risky investments promising unrealistically high returns. Impulsiveness can lead to un- planned spending and derail your goals. Your past shapes your future Your family background, life experience

Christine Ibbotson

Building a financial team

D ear Money Lady Readers, to know if you have the right invest- ment plan for your future. Here’s what all the economists say: “You need to have a well-diversified portfolio which includes bonds, cash, and high-quality stocks, one that is rebalanced based on your age, risk tolerance and future aspi- rations.” Okay, textbook – right? But what does that mean? How do you do that? How are you going to get started? Well, you need to be build a financial team. If your car breaks down or you get into an accident, you don’t fix it by yourself in your garage? You or your in- surance company hires a professional mechanic to fix it and then everything is great again. Same idea with money. You need to have a professional that can help you achieve all those financial goals you want out of your life. With everything that’s going on in the markets today it’s hard You want an investment “partner.” Pick an advisor who really has your best interests at heart, and don’t just pick the first person you talk to, or a relative that wants to help out. You want to be selective, not just with the advisor, but also the brokerage firm. Now let’s talk about fees. What should you pay? There are two types of fee structures – transac- tional or fee-based. Transactional fees are charged with every investment transaction. This is often the case when you buy fixed in- come investments such as bonds. A fee is charged when you purchase the bond and then again when you sell it. There aren’t many advisors that still do trans- actional fee structures when buying se- curities. That was the old “stockbroker style” of buying and selling stocks on a

monthly basis to generate revenue not only for the client but also the broker. Most advisors today lack the expertise to execute this style of investing prop- erly; however, if you didn’t have a good stockbroker back then, it still could be costly. We used to call this method the “pump & dump,” which was basically how a broker would make an income, moving stock around and charging a transaction fee every time. Nowadays advisors want to put you in a fee-based plan, with a fixed monthly fee designed to offer more protection for the clients along with ensuring a consistent reve- nue stream for the advisor and the bro- kerage firm. Basically, you want to ask yourself: is this advisor a valued partner that I’m willing to pay for, and most importantly am I satisfied with the services that they provide? Personally, I think It’s always a good idea to periodically check out the com- petition, talk to your friends and see what they pay. When you are young you may not mind spending more for invest- ment advice, but as you age and move investments into secure fixed income products with lower risk and smaller gains, your number one problem will be fees and expenses. Let me leave you with this TIP: Your new advisor needs to be focused on how to secure your capital with adequate growth in the most tax-efficient man- ner; and if they always do that, you will always make money. Christine Ibbotson is a Canadian fi- nance writer, radio host & YouTuber. For more advice check out her YouTube channel: ASK THE MONEY LADY – Your Canadian Finance Coach.

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